Minsheng Securities analyst vault, said recently that China is about to enter a region-wide steel overcapacity era. He analyzed that as of 2011, according to the estimates of the relevant institutions, China's crude steel total capacity is expected to reach 850 million to 900 million tons, significantly higher than the demand of more than 600 million tons, showing a surplus situation. China's Pearl River Delta region and the Midwest in some provinces and cities is still in the early development of industrialization, there is a certain gap between supply and demand, some steel mills can also enjoy the bonus of the structural region benign market.
But step into 2012, Baosteel Zhanjiang and Wuhan Iron and Steel Fangchenggang two million-ton steel project approved, is expected to put into operation in 2014 and 2015, respectively; Xinjiang Shougang, Baosteel and Xinxing Ductile Iron Pipes total of more than a thousand tons of capacity building is progressing smoothly , 2012 to 2013 will come into operation; heavy steel relocation approved, production can also be stepped toward the 10 million tons of Xining Special Steel and Jiuquan Steel production; eager to have expansion.
In his view, the coastal steel base project and the western steel expansion forced the Chinese iron and steel into a region-wide surplus era. "12th Five-Year" period, 900 million tons of crude steel production capacity was significantly greater than the demand of about 700 million tons, steel production capacity has entered the country across the region the era of excess, the industry marginal profit will become the norm.
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